Supplement Industry Has 'Rare Opportunity' to Seek Regulatory Reform

The Donald J. Trump administration is granting American businesses—including the dietary supplement industry—an opportunity to seek elimination of, and changes to, onerous regulations on the books of the federal government.

In assisting with implementation of executive orders issued by the president, FDA’s various centers—including its Center for Food Safety and Applied Nutrition (CFSAN)—have published notices, requesting public comment on potential changes to its regulations to reduce regulatory burdens, while continuing to meet the agency’s obligations to protect public health.

“Today, FDA’s regulations comprise more than 4,000 pages in the Code of Federal Regulations,” Anna Abram, FDA’s Deputy Commissioner for Policy, Planning, Legislation and Analysis, wrote in a Sept. 7 blog, commenting on FDA’s efforts to engage the public to modernize its regulatory framework. “Some regulations may not adequately reflect advances in science, technology or changes in industry practice.”

Steven Tave, director of FDA’s Office of Dietary Supplement Programs (ODSP), said the agency will be examining its regulations, including cGMPs (current good manufacturing practices) governing dietary supplements and other regulations impacting the industry.

“Are there ways to modify them [FDA regulations]?” asked Tave in an in-person interview at SupplySide West in Las Vegas. “Are there regulations that should be removed? Are there things that should be changed in order to improve the regulatory environment in a way that helps us do our job better, without burdening businesses in an unnecessary way?”

Anthony Young is a partner with Kleinfeld Kaplan & Becker LLP who has practiced food and drug law for decades and serves as general counsel of the American Herbal Products Association (AHPA). He urged the supplement industry to take advantage of a “rare opportunity” to seek regulatory reform.

“Government agencies do not look at these things [regulatory reforms] on their own,” Young said in a phone interview. “This administration has directed them to do so, and the industry should be determining what its priorities are for reform. We have a lot of dietary supplement regulations, and this is that rare opportunity to seek change.”

CFSAN’s Sept. 8, 2017 notice was published in the Federal Register, requesting comments through Dec. 7, 2017. The notice was issued following two executive orders (EOs) adopted by Trump, including one (EO 13777) that directed individual agencies to establish a Regulatory Reform Task Force. Each task force must evaluate current regulations, as defined in a separate executive order (EO 13771), “and make recommendations to the agency head regarding their repeal, replacement or modification, consistent with applicable law.”

Among the possible regulatory reforms in the dietary supplement industry, Young favored an exemption from the cGMPs for very small businesses. He noted regulations under the Food Safety Modernization Act (FSMA) include an exemption for very small farms.

Commenting on other possible changes, the food and drug lawyer added, “We think that some of the regulations are read by FDA as requiring more analytical requirements than are available, and that FDA needs to gear back on their views there.”

He also said FDA has imposed requirements on own-label distributors in warning letters, but Young noted such obligations aren’t spelled out in the cGMP regulations.

FDA’s Federal Register notice reflects Trump’s focus on lightening regulatory burdens. With the support of Congress and through executive actions, the Trump administration stopped regulations adopted under the Obama administration that hadn’t yet fully taken effect, noted Stuart Pape, a shareholder in Washington at the law firm Polsinelli PC, in a podcast interview with INSIDER. The Trump administration also has deferred effective dates of regulations, noted Pape, who cited, for example, FDA’s extension of the compliance date for menu-labeling requirements.

“I think overall, you’re seeing a fairly substantial pullback of the regulatory apparatus, and I think it will be for the duration of the Trump administration, whatever that turns out to be,” said Pape, who leads his firm’s FDA practice group. “It will be a challenge to get a regulation through the [White House’s] Office of Management and Budget (OMB), unless it’s a regulation that is relieving burden as opposed to imposing a burden.”

NDI Guidance

It’s possible OMB’s Office of Information and Regulatory Affairs (OIRA) could review FDA’s draft new dietary ingredient (NDI) guidance, or a proposed final version. As the U.S. Government Accountability Office noted in an April 2015 report, OIRA “reviews some significant guidance documents” before they are issued.

The NDI guidance “is potentially something that the administration could choose to weigh in on if they wanted to,” Tave, FDA’s dietary supplement chief, acknowledged during his SupplySide West interview, “but … that’s not new to this administration.”

Asked about FDA’s efforts to finalize its NDI guidance, Pape reported a great disparity of views between industry and the agency. FDA issued a revised draft guidance in August 2016.

“And I think FDA would have to go from where it is at the moment in draft to a very different place,” said Pape, a former FDA lawyer, who worked in the Office of the Chief Counsel. “And it’s not clear that it will do that.”

Added Pape: “I’m not at all convinced that FDA has the wherewithal and the commitment to devote the resources to trying to get this particular guidance across some finish line.”

Although FDA hasn’t committed to a specific timeframe for finalizing an NDI guidance, the agency has been working on issues it discussed in its 2016 draft—including the development of an authoritative list of old dietary ingredients marketed before Oct. 15, 1994.

“We understand that the issues in the guidance are important to industry and we understand there’s a need for clarity,” Tave said, “and so what we’re trying to do is find ways to make open and transparent progress on important issues in ways that are useful and inclusive of stakeholders, while we continue to work on all of the issues in the guidance document.”

FTC Uncertainty

While the policies of the Trump administration could result in regulatory reform at FDA and other agencies, the current environment at the Federal Trade Commission (FTC or Commission) has created uncertainty for the US$41 billion supplement industry.

During an interview in September, John Villafranco, a partner with Kelley Drye & Warren LLP, described the Commission as being in “a tremendous state of flux." Villafranco was interviewed when the normally five-member Commission was only occupied by two commissioners: Terrell McSweeny, a Democrat; and FTC Acting Chairman Maureen Ohlhausen, a Republican.

Then in October, Trump nominated two individuals to serve on the Commission: Joseph Simons, a well-known antitrust lawyer; and Rohit Chopra, a senior fellow at the Consumer Federation of America. If Simons and Chopra are confirmed by the U.S. Senate, the Commission will be controlled by a Republican majority: Simons and Ohlhausen, with Chopra serving as the lone Democrat. Simons will replace McSweeny, whose term already officially expired.

Some lawyers familiar with the agency said they do not expect a sea change in policies impacting consumer protection issues, such as the types of enforcement cases brought against the dietary supplement industry.

“The composition of the Commission is incredibly important for all of U.S. business, but it is, in my mind, especially important for the supplement industry because we’re coming out of a period of great activism at the Federal Trade Commission,” Villafranco said in a podcast interview with INSIDER in September before Trump announced his FTC picks. “I think that the hope in the industry is that the pendulum will shift with a Republican as chair back to an environment where we’re not seeing record redress amounts and … an attempt to hold dietary supplement companies to a higher legal standard in terms of what is required by the law to substantiate product claims.”

Ohlhausen, meanwhile, has taken steps viewed as positive by industry. For instance, Villafranco noted she has helped ease administrative burdens for companies that must produce documents in response to a FTC probe.

“Commissioner Olhhausen has taken some very concrete steps to reduce that burden and make it easier for companies that are engaged in the process of providing substantiation to the FTC … that would support claims that are being made,” said Villafranco, who advises corporations on advertising and marketing practices.

Before news broke in October of Trump’s nominations, Villafranco cited “a great deal of uncertainty” over FTC’s future direction.

The dietary supplement industry has accused FTC in some instances—including a court case involving Bayer Corp.—of imposing unduly burdensome requirements to substantiate advertising claims. Villafranco noted the same staff attorneys working under former Chairwoman Edith Ramirez remain at the agency.

“[I]f you were out there doing 55 or 50 on the highway with your claims practices, it’s not a time to begin to do 70 miles per hour,” the regulatory lawyer said in September. “That’s for sure. You still need to proceed carefully and look to past Commission guidance to determine … what are your best practices on a going-forward basis.”

But the future Republican-controlled Commission under Simons could provide some relief to supplement companies.

“I think that we would expect the FTC under a new Commission to be more business-friendly generally and rely on existing guidance on food and supplement advertising, rather than trying to push for stringent clinical trial standards," said Katie Bond, special counsel to Kelley Drye & Warren LLP, in an email to INSIDER, commenting on Trump's FTC nominees.

Enforcement Expectations

And in a broader sense, federal agencies in the Trump administration may be less eager than the Obama administration to crack down on industries out of compliance with regulations and the law. Speaking during a panel discussion on the Trump administration at SupplySide West, Polsinelli’s Pape presented data to highlight Republican administrations bring fewer enforcement actions than Democratic administrations.

“Does that mean that [FDA] inspectors won’t issue 483s, that there won’t be warning letters issued by district offices?” he asked in the earlier podcast interview with INSIDER. “No. They’ll be some. Does it mean that it will be harder for district offices to meet the burden of getting approval from headquarters to bring substantial cases? Yes.”

The former FDA lawyer, however, cautioned that others could fill the void in federal enforcement activity.

“And … in some respects, that’s a good example of industry should be careful what you wish for,” Pape commented. “You might go to bed at night wishing that there was less FDA enforcement, until you’re staring down a complaint filed by a state AG.”